Apple’s iPad has been the darling of the rumour mill for months now, and now there is talk of a couple of interesting developments.

According to Digitimes, Apple will follow up the launch of the iPad 3, slated for March 7, with the introduction of a stripped down iPad 2, which should feature 8GB of storage and sell for a pretty competitive $349 to $349. The decision makes sense, as Apple used a similar approach with the iPhone last year.

In addition, rumours of a smaller iPad are not going away, either. The baby iPad is said to feature a 7.85-inch screen, probably the same 1024×768 resolution used on current iPads and it should sell for just $249 to $299. Samples are said to be out already, but volume production is not expected until Q3. The 7-incher would allow Apple to counter competition from affordable Android units, namely the Kindle Fire and Nook.

Late Apple CEO Steve Jobs dismissed the notion of a 7-inch iPad two years ago, so the rumours are not going down well with some observers, who believe Apple will stick to 10-inch tablets for the foreseeable future.

February 14, 2012
12:30 p.m PT/3:30 p.m ET

Forty five minutes with the man who took over when Steve Jobs stepped down

Forty five minutes with the man who took over when Steve Jobs stepped down

Tim Cook

For those of you who missed Tim Cook’s keynote presentation at the Goldman Sachs Technology and Internet Conference in San Francisco Tuesday, the audio is still available in QuickTime on Apple’s (AAPL) website here.

For those who prefer to read than to listen, we’ve posted an edited transcript of his remarks below the fold.

Commercial production of Apple’s anticipated television set is expected to begin in February at a Sharp plant in Japan, while competing HDTV makers are reportedly desperate to find out just what Apple plans to sell.

Jefferies analyst Peter Misek said in a note to investors this week that Apple is expected to partner with Sharp for TFT-LCD panels for its so-called “iTV.” Production is expected to begin in February at the company’s Gen 10 Sakai facility in Osaka, Japan, placing the television set in position for a mid-2012 launch.

Apple’s expected entrance into the television market is said to have sent other TV makers “scrambling” to identify what the features of the product may be.

“They hope to avoid the fate of other industries and manufacturers who were caught flat footed by Apple,” Misek wrote. “Having said that, it appears that mainstream TV manufacturers are likely to be at least 6 to 12 months behind in a best-case scenario.”

TV makers are said to be looking at Android as a potential option to counter Apple’s anticipated television set. In that scenario, the television market would act much like the current smartphone landscape, with manufacturers making the hardware and Google providing the operating system.

TV makers are said to be looking to Android because they lack the software and cloud capabilities Apple already offers. Earlier reports have also suggested that Apple will implement its proprietary voice recognition service, Siri, to allow controller-free navigation and further differentiate itself from current products on the market.

Rumors of an Apple television set picked up considerable steam with the release of the authorized biography of Steve Jobs. To biographer Walter Isaacson, Jobs hinted at a completely new product that would feature “the simplest user interface you could imagine.”

In an interview published last week, Isaacson revealed that before he died, Jobs had three products he wanted to reinvent, with the television being first among them, followed by textbooks and photography. Jobs reportedly felt there was “no reason” for televisions to be as difficult to use as they currently are.

Misek’s timeframe for a mid-2012 Apple television launch is slightly more aggressive than some other rumors have suggested. For example, last month The New York Times forecast Apple to announce the product by late 2012, with it going on sale to consumers by 2013.

Not enough hardware eye candy. That was the undertone of disappointment that surrounded the introduction of Apple’s new iPhone.

Apple’s television plans are a case of “when” not “if” the latest rumors insist, with Steve Jobs’ well-quoted “I finally cracked it” comment believed to be referring to Siri replacing the traditional remote control rather than the TV hardware and design itself. ”Steve thinks the [TV] industry is totally broken” a source told the NYTimes, one of several who apparently confirmed that Apple was experimenting with TV hardware and software. ”Absolutely, it is a guaranteed product for Apple” was the message, with execs supposedly knowing the true Apple TV was on the roadmap as far back as 2007.

To successfully carve out a gap in what has become a hotly-contested, low-margin segment, however, Apple needed not only its coveted design but to polish the user experience. That supposedly began with replacing one of the mainstays of the current living room setup, the remote control. Siri – which was launched on the iPhone 4S and reacts to naturally-phrased spoken commands – is Apple’s solution, in Steve Jobs’ words allowing for a TV that has “the simplest user interface you could imagine.”

More than a year ago, supply chain sources speaking to the newspaper suggested they’d seen “large parts floating around” that “looked like [they] could be part of a large Apple television.” However, insiders at and close to Apple said that any product builds were on hold until the software and control side came up to speed. That, with Siri – still described by Apple as in beta – looks to finally be coming of age.

Other recent leaks have indicated that Apple’s iTunes chief is currently leading the television project, while – like the existing Apple TV set-top box – the standalone television is believed to run iOS; it would also have FaceTime video calling, as per recent iPhone, iPad, iPod touch and MacBook models. The newspaper argues that the limiting factor today is the cost of large display panels, something that Apple needs to see fall if it hopes to compete with the affordable TVs on sale today. Nonetheless, its prediction is a true Apple television by 2013.

Next Media News’ CGI animations have become a staple for us. The company, which recreates news stories with humorous animations, started with the Tiger Woods last year and never seems to fail to make us laugh. NMN often covers tech news, and in the last few weeks the network has covered the rumored sale of Yahoo!, Apple’s Siri personal assistant, the recent Blackberry outage, and, of course, the death of Steve Jobs.

“He very much wanted to do for television sets what he had done for computers, music players, and phones: make them simple and elegant,” Isaacson wrote.

Isaacson continued: “‘I’d like to create an integrated television set that is completely easy to use,’ he told me. ‘It would be seamlessly synced with all of your devices and with iCloud.’ No longer would users have to fiddle with complex remotes for DVD players and cable channels. ‘It will have the simplest user interface you could imagine. I finally cracked it.’”

The Apple TV set has been rumored for over a year now. We think Apple would shake up the TV industry just like it shook up the phone industry with the iPhone, and the portable computing market with the iPad.